Renaissance Capital Initiates Oando Coverage With ₦123 Target Price, a 262% Upside Based on Balance Sheet Deleveraging

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Oando Plc has the reserves to become one of Nigeria’s largest indigenous oil-and-gas growth stories. What it lacks, according to Renaissance Capital Africa, is the balance sheet needed to turn those reserves into free cash flow and shareholder returns.

Renaissance initiated coverage of the Nigerian energy company with a Buy recommendation and a ₦123.10 target price, implying 262.1% upside from the ₦34 reference price used in the report.

“Ultimately, this is a highrisk, high-reward turnaround story where successful recapitalisation is a prerequisite for its market valuation to re-rate,” Renaissance Capital Africa analysts Olumide Sole said, in a September 01 note to clients.

The call rests on a high-risk premise: Oando must complete a recapitalization, execute a large production ramp and reduce leverage after the acquisition of Nigerian Agip Oil Co. assets transformed its upstream portfolio.

The brokerage’s research note said Oando is a deeply discounted, reserve-backed turnaround story rather than a conventional earnings-growth investment, whose value lies mainly in the upstream business.

Renaissance’s ₦123.10 target price means the share price is deeply discounted at the ₦34 reference price. But the 262% upside is conditional.

The investment case

Oando’s acquisition of Eni’s Nigerian Agip Oil Co. interest in 2024 expanded the group’s 2P reserves to about 920 million barrels of oil equivalent, including a roughly 61% gas component.

That places the company among Nigeria’s largest indigenous reserve holders and gives it a reserve life estimated at approximately 78 years at 2025 production levels.

Renaissance estimates that Oando’s working-interest production can increase more than fourfold, from 32,500 barrels of oil equivalent a day in 2025 to 145,400 boepd by 2030. The…